Exchanges in Germany

Stock Exchanges

The Frankfurt Stock Exchange is the largest of the seven stock exchanges in Germany. The history of the Frankfurter Wertpapierbörse (Frankfurt Stock Exchange) dates back to the period of medieval fairs. Beginning in 1330, Frankfort became an important center for commercial and monetary transactions.

During the sixteenth century, wholesale commerce and the banking sector became established in Frankfurt. Merchants from all over Europe came to Frankfurt in order to engage in trade. Since there was still no single currency in Europe or in the German Empire, payment was based on a large variety of coins. Due of this, monetary transactions proved to be extremely troublesome. The abundance of means of payment and the free exchange rates made it easy to engage in usury and swindles. To counter the deterioration of coinage, merchants at the fair met in 1585 in order to establish uniform exchange rates. This event is recognized as the birth of the Frankfurt Stock Exchange.

The first official exchange list, which presented the average prices for 12 denominations of currencies, appeared in 1625 and the oldest exchange list that still exists dates back to 1721. In 1682, the first Exchange Rules and Regulations were enacted, which led to the establishment of an official stock exchange administration. Initially, only trading in bills of exchange was undertaken on the Frankfurt Stock Exchange. Trading in promissory notes and bonds was initiated at the end of the seventeenth century and trading in government bonds began at the end of the eighteenth century.

The first share issue, a participating certificate of the Austrian National Bank (Österreichische Nationalbank), was traded in 1820. The main focus of trading on the Frankfurt Stock Exchange, however, was still on bonds. In contrast to the other large European stock exchanges, the Frankfurt market was initially cool to the more popular share transactions in numerous stock corporations. Until 1850, the Frankfurt Stock Exchange was primarily developed into a center for trading in government bonds and funds.

The Frankfurt Stock Exchange was severely impacted by World War I. Foreign shares and bonds were sold by German investors and the freed up capital was invested mostly in government bonds. By the end of the war, all foreign securities had disappeared from the exchange, which led to Frankfurt losing its standing as an international stock exchange. Inflation set in and reached its peak in 1923. The stock exchange saw unprecedented losses in securities. By contrast, demand for stocks as speculation objects sharply increased. In October 1929, stock exchange prices fell dramatically and on October 25, 1929, the exchange experienced “Black Friday”. The economy only began to restabilize in 1932.

With the Nazi takeover in 1933, overall economic policy was incorporated into the general government and war policy. Stock exchange supervision was taken over by the central government, which resulted in the number of exchanges being reduced from 21 to 9. The Frankfurt Stock Exchange acquired the Mannheim Stock Exchange in 1935. The merged institution was called the Rhine-Main Stock Exchange. Although the Frankfurt Stock Exchange continued to function as a domestic stock exchange, it had, in reality, no major function. Nazi economic controls constricted the development of the free market and trading. For the most part, potential capital assets were only supposed to benefit the war economy and could no longer be invested in larger bonds or shares.

Following the collapse of the Nazi regime in 1945, the Frankfort Stock Exchange remained closed for six months. It was reopened in September 1945 as one of the first German stock exchanges. It was only after the currency reform of 1948 and the growing consolidation of the German economy that the Frankfurt Stock Exchange gradually recovered its old significance. Beginning in 1956, the purchase of foreign securities was again permitted in Germany.

Deutsche Börse AG was founded in 1993. It has since been the operating body of the Frankfurter Wertpapierbörse, the entity under public law, or, as it is better known outside of Germany, the Frankfurt Stock Exchange.

Börse Berlin was founded in 1685 through an edict of the Elector of Brandenburg, Friedrich Wilhelm. Initially, it simply provided an assembly location for the two guilds of the chandlers and the dress makers for their reciprocal business consultations. The first exchange session took place on February 25, 1739. After several relocations, the exchange moved into its first formal exchange building in 1805. Prior to this, exchange sessions during the morning (morgensprachen) occurred in a garden house in the Lustgarten and its afternoon sessions (grotte) were often under the clear sky.

The Börse Berlin first experienced a period of prosperity at the beginning of industrialization. In 1820, a general economic upturn began. Numerous issues of government bonds increased trading. In 1840, the first railway shares were officially quoted and 8 years later, bank and mining stocks followed. High French reparation payments after the German-French war of 1871 were used to finance insfrastucture measures and helped to trigger the boom of promoterism in Germany.

In 1912, a metal commodity exchange is added to Börse Berlin. Copper, zinc, lead, aluminium and antimony began trading in 1913. With the start of World War I in 1914, trading in these products ceases. From 1916 to 1918, all trading is halted on the exchange. After the war, exchange trading in Berlin increases dramatically due to industrialization.

After the currency conversion in 1924 that introduced the Reichsmark, trading becomes less turbulent. However, due to poor economic and credit policies along with massive balance of payment difficulties of the state, the stock market collapsed on May 13, 1927. Beginning in 1933, the new governance handicaps the functioning of the exchange. On March 1, 1937, the quoting of foreign stocks is halted. The Metal Exchange closes in 1939. On February 13, 1943, exchange trading with continuous quotes comes to a halt and shortly thereafter, a government act rules that the Reichswirtschaftsminister will be responsible for fixing the prices of securities. It remains open in this form until May 18, 1945.

After the reform of the banking and security industry in the West sectors of Berlin, stock trading resumed on July 19, 1950, initially in the form of a regulated open market. On March 11, 1952, trading on the official market is re-opened in Berlin. The postwar history of the exchange has characterised by its technical innovation. In 1965, slate boards were replaced by a new price display system that incorporated slide projectors and there were live TV transmissions from the exchange floor which, for the first time, allowed retail investors to follow exchange trading from their homes.

In 1974, computer technology is incoporated into the exchange. Exchange transactions were processed electronically with the help of modern data processing equipment. Beginning in 1984, prices are displayed digitally. Two new market segments, the Regulated Market and the Open Market, were established in 1987. Admission requirements to both segments was lower than the Official Market and brokers took responsibility for price determination. In 2007, the Regulated Market and the Offical Market merged pursuant to a change in exchange law stipulated by MiFid. The Open Market remained unaffected by this change.

The origins of the Munich Stock Exchange (Börse München) go back to the 1830s but the exchange was officially founded in 1869 when traders from Munich started meeting regularly to trade securities. It was closed during World War I but reopened in 1918. In 1935, it merged with the stock exchange of Augsburg to form the Bayerische Börse. Finally, in 2003, it was renamed the Börse München.

The Dusseldorf Stock Exchange originated as a cereal market in 1841 due to its central transport links to the Lower Rhine grain trade. In 1865, a list of guidelines was developed for the products and values ​​to be implemented on the Dusseldorf Stock Exchange. On January 18, 1875, the first Dusseldorf Stock Exchange meeting took place in the Knights Hall of the Tonhalle.

The exchange was closed during World War I but reopened soon after the end. In 1931, a banking crisis caused all German stock exchanges to close for 7 weeks. There was a consolidation of exchanges in 1935 which included the Rheinisch-Westfälische Börse in Düsseldorf taking over the tasks for the stock exchanges of Cologne and Essen.

During World War II, exchange operations were impacted. After currency reform on July 14, 1948, the Düsseldorf Stock Exchange resumed trading in securities as a controlled over-the-counter market. It resumed official trading in May 1949. It quickly became a top-selling German stock exchange.

On January 1, 2001, the holding company for the stock exchange in Dusseldorf, the Rheinisch-Westfälische Börse zu Düsseldorf, was transformed into the Börse Düsseldorf.

On February 11, 1861, the Stuttgart Stock Exchange Association (Stuttgarter Börsenverein) was established. The Stuttgart Stock Exchange Association was recognized as a public stock exchange association on May 25, 1877. The publication of the first official stock exchange list on January 31, 1881 had 44 listed securities. It only included German securities with two exceptions.

In 1897, the exchange formally changed its name to the Stuttgart Securities Exchange (Stuttgarter Effektenbörse). Before the World War I, the stock exchange contained 129 securities but by 1914, it had dropped to 59 official securities listed. The exchange closed during the war but reopened September 1, 1919. After many companies have their shares admitted to the Stuttgart Stock Exchange between 1921 and 1925, the number of officially listed securities rises to 68 with the number traded on the open market being 94.

In compliance with the stock exchange regulations of September 1, 1936, it was renamed the Wuerttemberg Stock Exchange (Wuerttembergische Wertpapierbörse). The exchange closed during World War II but reopened November 5, 1945. Initially, however, securities only traded on an unregulated open market. In 1949, it is renamed as the Stuttgart Stock Exchange (Stuttgart Wertpapierbörse). Official trading after World War II did not start until the autumn of 1950.

By 1995, the Stuttgart Stock Exchange becomes the second largest stock exchange in Germany behind the Frankfort Stock Exchange.

When the Hamburg Exchange was founded, in 1558, the primary focus was upon goods trading but financial transactions and bill transactions were also carried out. The history of the Hanseatic Stock Exchange Hamburg, or the Hamburg Exchange for short, can thus be traced back over 450 years.

Regular securities trading began in 1815, making the Hamburg Exchange the oldest of the German stock exchanges. Since 1999, the Exchange has been working with the Hanover Stock Exchange of Lower Saxony under the joint umbrella company BÖAG Börsen AG.

Eurex Bonds GmbH was founded in October 2000 as a joint initiative of Eurex Frankfurt AG and leading financial institutions and is an acknowledged BaFin-regulated multilateral trading facility (MTF) which used to operate an electronic platform for bond and basis trading. As of December 31, 2017 Eurex Bonds has terminated its business operations.

Derivative Exchanges

Since its inception in 1998, the Eurex Exchange has established itself in electronic trading and clearing. Operated by Deutsche Börse AG, it offers a broad range of international benchmark products and operates the most liquid fixed income markets in the world, featuring open and low-cost electronic access. With market participants connected through 700 global locations, trading volume at the Eurex Exchange exceeds 1.7 billion contracts a year, making it a key market place for the worldwide derivatives community.

Since its inception in 1999, Eurex Repo has shown impressive development. Starting with the Swiss Franc Repo Market, including the automatic auctioning from the Swiss National Bank (SNB), followed by the introduction of GC Pooling in 2005, Eurex Repo currently operates several markets with a multitude of products in secured funding and financing.

Eurex Repo is the leading provider for international financing in the secured money market business (repo and securities lending). Its highly liquid marketplace combines state-of-the-art electronic trading, with the efficiency and safety of clearing as well as standardised collateral management and settlement for secured funding and financing transactions.

Founded in 2002, the European Energy Exchange AG (EEX) is the leading energy exchange in Central Europe. It develops, operates and connects secure, liquid and transparent markets for energy and related products. The EEX offers futures on energy, agriculture, metals, biomass and environmental commodities. In addition, it offers markets on emissions auctions and emissions secondary markets.

Commodity Exchanges

In 1872, the Bremen Cotton Exchange is founded as the Committee for the Cotton Trade by cotton traders/brokers, which was later joined by banks, shipping and forwarding companies, spinning mills and insurance companies.

The Port of Hamburg is northern Europe’s central grain trading hub. Grain trading companies use the Hamburg Grain Exchange to conduct their business. As the only commodities exchange under the roof of the Hamburg Exchange, it serves as a platform for initiating and brokering commercial transactions in grains, oilseeds, feed, pulses, seeds and other related items, as well as service transactions in relation to the these products.

The Hamburg Grain Exchange is operated by the Grain Traders Association of the Hamburg Exchange, which also represents the interests of wholesalers and foreign trade operators within the industry. There are 27 standard contracts for trading in grain, feed and pulses. These contracts are valid worldwide but are mainly used within Europe.